Individual Articles

Cruise ships

Neighborhood demands don’t look reasonable

The importance of the port cannot be ignored

Warwick Jones

Some folk on the Peninsula have a visceral hatred of cruise ships and their passengers. Their hatred has taken some time to foment. Except for the Coastal Conservation League (CCL) and some of its supporters, the opposition to cruise ship visits was largely latent at the time when City Council unanimously passed a resolution endorsing the Union Pier Plan and encouraging cruise ships to use the City as an embarkation point. That resolution committed the State Ports Authority (SPA) to limit ship visits to an average of 2 a week and vessel size to a capacity of about 3500 passengers.

Initially, the opposition to cruise ships centered on the agreement between the City and the SPA. The Charlestowne Neighborhood Association and the Historic Ansonborough Neighborhood Association supported the Union Pier Plan – to build a new terminal to serve cruise ships, provide parking for passengers’ cars, and to develop the remainder. The associations argued that the agreement was not legally binding in relation to the frequency of visits and the size of cruise ship. They wanted something that was. The City said it believed that the resolution was binding but besides, state law did not allow the City any control over cruise ship visits and their size.

Recently the two Peninsula associations have hardened and extended their opposition. They continue to seek what they consider a legally binding agreement but they want to relocate the Cruise ship terminal, and the SPA to sell the whole of Union Pier to a private developer. And there is more as well. Their demands can be seen in the petition drawn up by Charlestowne members Randy Pelzer and Steven Gates and endorsed by their association and HANA by pressing Download file.

The petitioners suggest the Cruise ship terminal be located at the northern end of the Columbus Street. The SPA tells us that the site is unsuitable and for a number of reasons – too far from the Historic district and too many difficulties with transport issues relating to cruise ship passengers and rail freight passing in front of the terminal from docks to the south. But more importantly, breakbulk cargo operations are growing and the SPA needs all the site to service customers – the most important of which is BMW.

The wording of the petition indicates that it does not matter to its authors if the Columbus Street terminal is unsuitable, just move it somewhere, anywhere! (See Conclusion on page 8 of the petition.) Sure says the SPA, if we were to move it to Columbus Street, then there will be no Union Pier development. We will need the pier for cargo operations.

We presume that the neighborhood associations think that the SPA is bluffing. But I recall when the SPA began discussing the development of the North Charleston Container Terminal in 2007 and ran into opposition from neighborhoods over truck access. It referred to a study undertaken by the Corps of Army Engineers, the conclusion of which was that there were no other undeveloped sites in Charleston harbor and its reaches that were suitable for a terminal. The site at North Charleston was the last one!

So assuming the Corps is correct in its assessment, the refusal of the SPA to relocate the Cruise terminal somewhere else and the refusal to sell Union Pier in its entirety have merit. The SPA does not have any opportunity to expand beyond its present and planned terminals. To give up all of Union Pier to development and carve off part of the Columbus Street terminal for Cruise ships would likely cut into its ability to provide port services in the longer term.

The authors of the petition stated at the HANA meeting that the SPA had plenty of spare capacity, particularly with the falloff in volumes in recent years. It did not need Union Pier, they claimed. Indeed, the North Charleston Container Terminal would be ready by 2018 and alleviate any congestion. A pretty simplistic assumption!

We feel the authors have underestimated the importance of Charleston. They are right though - volumes through the port have fallen in recent years. To see related statistics, press Download file

The fall in recent years reflects a number of factors, not least of all, the recession. But as the SPA points out in its Official Statement to a $170 million bond issue late last year, it also was focusing on European trade which failed to grow. Consequently it lost out to Savannah and some other Eastern ports. To see comparison, press Download file

Another reason for Charleston’s poor performance has been the fact that the Panama Canal cannot yet accommodate the large Panamax vessels. Consequently, a lot of cargo from Asia destined for the East coast is landed at West Coast ports and railed or trucked across the nation. When the widening of the Panama Canal is completed in 2014, these ships will be able to travel east and Charleston’s traffic should be boosted. By how much will depend on when Charleston’s Harbor is deepened to 50 feet from 45 feet to fully accommodate the larger vessels. So the future is promising, perhaps very promising.

It is important to note that the Charleston Harbor has an advantage over all of the Southeastern ports. It is the easiest to deepen to accommodate the larger ships. Savannah’s harbor can be deepened but at a considerably greater cost, and apparently with some environmental damage. Considering its potential greater importance, the SPA would be remiss to give up any significant part of its port area in Charleston.

This brings us to the petitioners’ request with which we have the greatest issue; they ask that the whole of the 71 acre Union Pier property be sold to a private developer and the proceeds used by the State to balance its budget. Although the figure is not mentioned in the petition, the authors at the HANA meeting and elsewhere have speculated a worth of $300 million or more. No, no, and no!

About 6 acres of the 12 acre Ansonborough Field site was sold to a development group in 2008 for $16 million – roughly $2.7 million an acre. That was when things were booming and we concede the price may have been even higher if a commitment to some affordable housing were unnecessary. The original project is now dead though some development is still slated to occur. Would a private developer pay today $300 million or more than $4 million an acre for the Union Pier site, admittedly with some water frontage? Arguable. And would the developer pay $300 million if half the land were to be set aside for parks and buffers? The SPA has not committed to any development plan as yet. But it is committed to the creation of parks and green space. There is no reason to believe that a private developer would be more sympathetic to the ambience of downtown Charleston than the SPA. Indeed, the SPA is working with the City and the Historic Charleston Foundation which have formed a citizens’ Task Force to study the problems and issues of the Union Pier and other developments

And whatever the amount raised by the sale or lease of property now comprising Union Pier, little or nothing is likely to find its way into state coffers. The property and funds belong to the SPA, and the SPA needs the money. Indeed, to take away the proceeds from the sale of any part of Union Pier could invite legal action from a bond holder. After all, the property is part of the assets pledged as collateral. The SPA’s profits and cash flow have been low in recent years. And it needs to find about $1.3 billion over the next 10 years to finance its capital programs. Profits and cash flow will have to improve dramatically in future to fund its plans. Press Download file to see related statistics

The response that the petitioners received from the two neighborhood association has encouraged them to seek support from others on the Peninsula. It may not be an easy task. The City Consortium of Neighborhood Associations heard a presentation by one of the authors of the petition but did nothing in support. We believe appearances are scheduled for other Peninsula associations.

We’d suggest to the petitioners that they refrain from critical and unfounded remarks in their meetings such as that the SPA was forced to tell the truth or a City Council member is in the Mayor’s pocket. Most folk don’t think the SPA lies and many on the East Side like their Council member. Such slights may go down well with some, but they are repellant to most of us. Disparaging remarks about the quality of tourists may also fly well in the “tony” neighborhoods of Ansonborough and “below Broad” but they offend in many of the others.

The authors plan to take their petition to Columbia and present it to the Governor and both Houses as well as others. We would not wager on their success. We cannot deny that majorities of members at meetings of Charlestowne and HANA voted for the petition. But most members stayed at home. Out of a combined membership of 650, only 180 members voted for the petition. But two neighborhoods out of 25 on the Peninsula and about 105 in the whole of the City do not make a strong impression. Dare we say, it looks very nimby-ish. And state Representatives and Senators are likely to look at the overall importance of the port to the State and indeed the nation, rather than the complaints of some residents in nearby neighborhoods. At least we hope so.